What’s “a Declining Power”?

In his most recent Washington Post column Fareed Zakaria asks a very good question: why is the Biden Administration driving Russia and China closer together?

The Biden administration has handled the Ukraine crisis intelligently and effectively, formulating a policy that could be described as “deterrence plus diplomacy.” It made credible threats about the costs of a Russian invasion and rallied its European allies in an impressive show of unity. And while (correctly) refusing to promise that Ukraine will be barred from NATO, it has offered to discuss almost everything else, from arms control to missile deployments.

This crisis, however, has highlighted a larger strategic failure, one that extends beyond this administration. One of the central rules of strategy is to divide your adversaries. But, increasingly, U.S. foreign policy is doing the opposite. Earlier this month, in a more-than-5,000-word document, Russia and China affirmed a “friendship” with “no limits.” The two powers appear to be closer to one another than at any time in 50 years.

but this is the part of the column that caught my eye:

For Russia — essentially a declining power — China’s support is a godsend. The most significant reason even tough sanctions against Russia might not work is that China, the world’s second-largest economy, could help. Russia recently announced new deals to sell more oil and gas to China, and Beijing could buy even more energy and other imports from the country. It could also let Moscow use various Chinese mechanisms and institutions to evade U.S. financial restrictions. “China is our strategic cushion,” Sergey Karaganov, a Kremlin adviser, told Nikkei. “We know that in any difficult situation, we can lean on it for military, political and economic support.”

To those who would argue that this is simply a case of two autocracies ganging up, it’s worth noting that it was not always thus. In 2014 (when both countries were also autocracies), China pointedly refused to support Russia’s invasion of Ukraine. It has still not recognized the annexation of Crimea. Similarly, Beijing did not support Russia’s intervention in Georgia and has expressed its support for that country’s territorial integrity and independence.

China and Russia are both adversaries of the West, but they are very different from one another. Lumping them together is a sign that ideology has triumphed over strategy in Washington these days. Vladimir Putin’s Russia is a geopolitical spoiler state. It has invaded two neighbors, Georgia and Ukraine, and occupied territory in those countries, something almost unprecedented in Europe since World War II. It has reportedly used cyberwarfare to attack and weaken more than a dozen democracies, including the United States. It has supported allies such as Syria’s Bashar al-Assad with brute force. It has murdered its opponents, even when they are living in countries such as Germany and England. And as a petrostate, it actually benefits from instability, which can raise oil and gas prices.

China is different. It is a rising world power that seeks greater influence as it gains economic strength. It has been aggressive in its policies toward some nations, but as a big economic actor, it can credibly claim to want stability in the world. As Robert Manning noted in Foreign Policy in 2020, “Beijing is not trying to replace the IMF, World Bank, WTO, and other U.N. institutions; it is trying to play a more dominant role in them.”

That China has gained economic strength over the last 30 years is indisputable. Is it a “rising world power”? For that matter is Russia a “declining power”? Let’s see some objective criteria.

In China’s case its population continues to grow but its rate of increase has declined sharply—its population is expected to start declining soon. Indeed, that decline may already have started. Similarly, its GDP per capita continues to grow but that growth, too, has declined sharply. It’s just about the same as Russia’s and a fraction of ours.

In recent years China has expanded its foreign relations network. Its strongest bids for world power status may be in the several South American ports China has negotiated and presently has under construction. These include a “megaport” in Chancay, Peru and a newly-negotiated port in Argentina, on the Atlantic, a major milestone.

For years China’s “Belt and Road” strategy resulted in improving relations with many of its neighbors. Today it is embroiled in disputes with a number of them including South Korea, Malaysia, Indonesia, Japan, Philippines, and Australia.

After a steep decline, Russia’s population is now roughly stable and its real per capita GDP is approximate stable as well. It remains the pre-eminent nuclear power in the world with a nuclear arsenal of about 4,500 warheads (compare with our 4,000).

IMO I find claims that Russia is declining suspect and, while China continues to strengthen, the rate appears to be slowing. For our part I think we’re certainly declining in a relative sense. Whether we’re declining absolutely depends on definitions. Despite some recent PR losses I still think we have the most capable military on the planet.

9 comments… add one
  • bob sykes Link

    The idea that Russia is a declining power is absurd. Under Putin it has recovered from the disastrous Yeltsin era. Its military is rebuilt and modernized. It runs trade surpluses even without oil and gas. It is the world’s largest wheat exporter. It has very little government debt, and most of it is held by Russians, not foreigners. It has the third largest gold and currency reserves in the world. It has a highly diversified, modern industrial base that is actually more comprehensive than ours. Its real (things) manufacturing base is likely larger than ours; it is larger in terms of metal production. On a PPP basis its total economy is about 10 to 20% larger than Germany’s. Some argue, based on total observable activity and production, that Russia’s economy is twice as large as Germany’s. Considering the large number of things Russia produces that Germany doesn’t, that latter estimate is entirely credible: things like army, navy, air force, strategic forces, manned space program, airliners…

    Russia has other important advantages that the US and its NATO/EU allies don’t. Russia has a patriotic, largely homogeneous population. That population supports the Russian government and Putin, who regularly gets 65% approval. (Alexei Navalny, the so-called “opposition leader,” has less than 2% support among Russians. Russia also has a reliable ally in China. Does anyone believe that Germany and Japan, occupied countries, are reliable allies, or even minimally competent allies?

    By every possible measure, the declining power in the world today is the US. Open civil warfare is a real possibility, as is economic collapse. The US population has been deliberately divided into mutually hating races. Moreover, the historic core white race, the actually productive race that drives the economy and technology, is in actual numerical decline. That threatens the existence of our modern economy.

    But the real threat to the US is that influential people like Zakaria and senior officials like Blinken are blind to all our problems and wrongly believe we are winning every contest. They even believe we are winning in Ukraine, of all places. That hubris, that extreme arrogance and ignorance makes our leaders liable to committing truly disastrous acts, like another general war in Europe. The Soviet Union won WW II in Europe; we were the icing on the cake. Russia will win WW III in Europe, if there are any survivors.

  • Russia also has a reliable ally in China.

    China will be a reliable ally of Russia until it isn’t. I’m sure Putin is painfully aware of that.

  • Drew Link

    “China will be a reliable ally of Russia until it isn’t. I’m sure Putin is painfully aware of that.”

    But the yo-yo’s in Washington aren’t.

    Maybe someone can help me. The whole Ukraine situation seems disjointed. The Biden Admin claims Putin is certain to invade. They threaten sanctions if he does. But when asked why they don’t go ahead and implement sanctions now the BA claims they lose leverage. But I thought invasion is a fait accompli? This is a bizarre argument. It seems there is a healthy amount of kubuki.

    I can think of no dumber policy of the BA than to reduce US energy production at the request of the prog environuts. It allows Putin to fill his coffers. And we beg the Saudis to pump more, so forget achieving environmental considerations. We just forego jobs and cash. Bizarre.

    And we supposedly worry about China, yet with every passing day we move more manufacturing to China, become more reliant on China for strategic materials and components. Its bizarre.

    About the only thing we have going for us is (contra Bob Sykes) the Chinese hold a ton of US securities. They have no loan and security agreement with the US; no liens on collateral. Financially, who owns who?

  • steve Link

    Looking at the actual numbers I am not seeing a real change in energy production. We are exporting more than we are importing for the third year in a row (the first year was a tiny excess s really the second.)

    https://www.eia.gov/totalenergy/data/monthly/pdf/sec1_3.pdf

    Steve

  • Drew Link

    In the year Biden has been in office the number of barrels per day produced in the US has declined 12%. Price has increased 26%. Reduced oil production has been driven by emissions standards (still up 5% over the last year), and of course the pipeline politics.

    Gasoline consumption is 92% of its 5 year average. Gas prices are not up so dramatically due to a rebound in consumption. Hence the pump prices you see. Its supply driven.

    Funny how supply and demand works.

    You really don’t think, steve, that someone in my business doesn’t follow energy issues do you? You can find all you really need in the EIA. Been reading it for years. If you want to find out what total energy production is doing investigate the LNG component.

    You seem to be the only one here in denial, or unaware of Biden’s debacle. You should apply for a position in his administration. They are in denial too. But prices don’t lie.

  • steve Link

    So I have the EIA table above open. It shows (it only has the first ten months) 2020 fossil fuels at 63,134. 2021 at 63,876. Of course that looks at stuff other than oil which I guess would undercut your point. Energy consumption was less than what we produced in 2020 so if I understand that supply and demand thing that should have kept prices down. Now we are producing more energy than last year but we are using the same amount we produce. that should make prices go up yes?

    Maybe you have special charts no one else gets to see? You dont think a loss of refineries matters?

    https://www.eia.gov/todayinenergy/detail.php?id=48636

    Steve

  • CuriousOnlooker Link

    The arguments would be more illuminating if it started with some facts.

    1. Fossil fuels are a fungible commodity
    2. Fossil fuels can be transported anywhere around the world
    3. Energy market prices are set by the marginal producer, and the price/demand curve is extremely inelastic.

    How the facts are applied is roughly from 2014-2020; the marginal producer of fossil fuels were US shale companies.

    Notably this took a lot of power/influence away from Russia (and Iran/Saudi Arabia/Venezuela) and to the US. An example was the Saudi price war to retain/gain oil market share in 2014, which drove oil from $100 to $60.

    What changed in 2020 was the oil crash and subsequent perceived hostility to additional US oil production is that US shale companies are no longer willing to be marginal producer. You can verify that observation this way

    (a) Despite oil being well above $70+ for over a year, US oil production has not increased much in last 18 months. At comparable prices in 2014-2020; $70 and above, shale companies would rapidly increase drilling/production.
    (b) The shale companies themselves are saying their priority is “capital discipline”. On earnings reports, they are saying their priority is returning capital to investors via stock buybacks, dividends. That profits margins come before marketshare.
    (c) Most importantly, shale capex has not significantly increased. Which is a sign production won’t increase significantly in the near term.

    This has left the Saudis and Russia as the marginal producer — and they have a much different price in mind for marginal production — its the highest price before there is demand destruction; vs for US shale drillers (before 2020) it being the breakeven price for production.

    That gives Russia a lot of money and power.

    If one rather the Saudis / Russia / Iran / Venezuela not have that type of leverage — the US and its allies has to follow a paraphase of Deng Xiaopeng; “it doesn’t matter whether the energy is green or black, as long as it is cheap”. Nuclear, renewables, fossil fuels, we must produce more of every type.

  • steve Link

    “What changed in 2020 was the oil crash and subsequent perceived hostility to additional US oil production is that US shale companies are no longer willing to be marginal producer. ”

    Is there any truth to that perception? What actions have been taken against shale oil producers? They did stop the Keystone pipeline but I think that was years from being finished anyway so not relevant now.

    Steve

  • CuriousOnlooker Link

    “ESG”.

    When the nominee for the Fed chair of bank supervision writes.
    “2021 is the year to reimagine capital as a tool for accelerating and smoothing the transition to a world of net-zero carbon emissions”
    and in other writings has specific regulatory actions the Fed could impose on banks to damage fossil fuel companies access to capital markets; any CFO takes notice. It means CFO’s would insist on funding new production from the profits of existing production rather then risk attempting to borrow — which implies a much higher price to contemplate new production.

    They are not the only actions. Regulatory harassment on pipelines means no new production anywhere where there isn’t spare capacity in pipeline to carry potential production to consumers.

    I would be clear its not just the Federal Government; but plenty of State Governments as well. But collectively, the effect is Russia is the swing producer now.

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